Consumer Bureau Plans Enforcement Based on FTC's 'Stable' Model

July 28, 2011
Bloomberg 
consumer financial protection bureau news

The Consumer Financial Protection Bureau plans to follow enforcement procedures "based largely on the existing, stable model" used by the Federal Trade Commission, according to a document on the bureau’s Web site outlining how it will seek documents, conduct hearings, and deal with witnesses. The rules track what the FTC already does, so "they present an existing, stable model of investigatory procedures that should not impose new compliance costs," the bureau says in the document. The posted rules by themselves give little insight into how forceful the CFPB will be in dealing with lenders, according to Howard Beales, a former FTC official who is now professor at George Washington University in Washington. "This says what the framework for enforcement is," Beales explains. "It says nothing about the mix between supervision and enforcement." Peggy Twohig, the bureau’s assistant director for non-bank supervision, and Steve Antonakes, the assistant director for large-bank supervision, have hinted that the agency may rely heavily on supervision. The bureau also posted rules similar to those used by prudential regulators governing how it will conduct reviews in which firms can contest administrative penalties.
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